Genesis filed for bankruptcy protection on Jan. 19 after previously freezing customer withdrawals.
Lawyers for bankrupt Genesis Global Capital said they were confident they could settle disputes with creditors this week, with the goal of getting the company out of Chapter 11 bankruptcy protection by late May.
Attorney Sean O’Neill spoke at the first hearing in Manhattan Bankruptcy Court for Genesis Global Capital, a cryptocurrency lending business owned by Digital Currency Group, Barry Silbert’s venture capital firm. .
Genesis and its two lending divisions filed for bankruptcy protection from creditors on January 19, two months after freezing customer withdrawals following the collapse of Sam Bankman-Fried’s FTX exchange. bottom.
The filing follows the bankruptcies of cryptocurrency lenders Celsius Network, Voyager Digital and BlockFi since July last year.
O’Neill said Genesis had “some confidence” to resolve the dispute this week after about two months of negotiations with creditors and would seek mediation if necessary.
“Sitting here now, I don’t think we need a mediator,” he said. “I am very optimistic.”
Brian Rosen, an attorney for a creditor with a $1.5 billion claim, said he was “very close” to a deal.
U.S. bankruptcy judge Sean Lane has granted a series of “day one” motions by Genesis, including payments to employees and key vendors common in bankruptcy cases.
Lane also said Genesis would not be required to reveal customer names on its creditor list, citing customer privacy concerns, and warned of potential phishing scams if names were later made public. I suggested that
Genesis has sold various assets at auction and has said it plans to go bankrupt by May 19.
The company reports assets and liabilities of just over $5 billion and says it owes at least $3.4 billion to more than 100,000 creditors. The company estimates it has about $1.7 billion in claims against its parent company.
The Genesis Bankruptcy does not include DCG, Genesis Derivatives, Physical Trading, Custody or Brokerage. DCG also manages asset manager Grayscale and news service CoinDesk.
The Genesis issue puts Silbert at odds with former US Olympic rowers and identical twins Cameron and Tyler Winklevoss. Gemini owes Genesis $765.9 million and is its largest creditor.
On January 12, the US Securities and Exchange Commission charged Genesis and Gemini with illegally selling unregistered securities through the Gemini Earn loan product.
The Winklevoss say Genesis should pay off $900 million in assets it owes to investors of about 340,000 Earn, and Cameron Winklevoss is calling for Silbert’s dismissal.
Chris Marcus, an attorney for Gemini and other creditors, told Lane that “there’s some work to be done” to get everyone on the same page, but he’s “cautiously optimistic.” He said the dispute could be resolved without mediators.
Genesis’ borrowers include hedge fund Three Arrows Capital and FTX-owned trading house Alameda Research, people familiar with the matter said last week.
Three Arrows and Alameda are also in bankruptcy proceedings.